Supreme Court cancels Amrapali registration, asks NBCC to complete projects

Deccan Chronicle.  | Parmod Kumar

Business, In Other News

Home buyers have to deposit dues in 3 months, their projects protected from sale.

The first of its kind judgement is expected to have a bearing on other realtors, especially on Unitech and Jaypee, which are facing litigation over project delays in the SC.

New Delhi: In a landmark judgment that came as a huge relief to 46,000 stranded home buyers, the Supreme Court on Tuesday ousted Amrapali Group from its prime properties and handed over the projects to state-run NBCC.

The apex court, which cancelled the registration of Amrapali Group under RERA, directed the Centre and the states to take steps against the project promoters where there is a delay in the completion of projects and ensure that they are completed in a time-bound manner and home buyers are not cheated.

The first of its kind judgement is expected to have a bearing on other realtors, especially on Unitech and Jaypee, which are facing litigation over project delays in the SC.

“Concerned Ministry of Central Government, as well as the State Government and the Secretary of Housing and Urban Development, are directed to ensure that appropriate action is taken as against leaseholders concerning such similar projects at Noida and Greater Noida and other places in various States, where projects have not been completed. They are further directed to ensure that projects are completed in a time-bound manner as contemplated in RERA and home buyers are not defrauded”, said Justice Arun Mishra and Justice Uday Umesh Lalit in their judgment.

Canceling the registration of Amrapali Group of Companies, accused of siphoning and diversion of home buyers money, under the Real Estate (Regulation and Development) Act, 2017 (RERA), the top court directed the National Building Construction Corporation to take over the projects that are left half way by the real estate promoters for completion.

Pointing to manifest irregularities, Justice Mishra speaking for the bench said, “The money laundering was resorted to by Amrapali Group/ Directors. The Noida and Greater Noida Authorities were grossly negligent in reviewing and monitoring the progress of the projects and in collusion with leaseholders failed to take action concerning non-payment of dues and illegally permitted the group to sub-lease the land without payment of dues. Bogus allotments of flats were made. There were other irregularities galore.”

Referring to the findings of forensic auditors and the fraud unearthed, including prima facie violation of FEMA, the court directed the Enforcement Directorate and other concerned authorities to “investigate and fix liability on persons responsible for such violations and submit the report in the court.”

Stating that court would be monitoring the investigations by all the agencies, including ED and police, the bench directed the Delhi Police to submit the report on investigations done so far.

Appointing senior lawyer R. Venkataramani as court receiver, the court said the cancelled lease deeds will now vest in the receiver.

A judgment described as landmark both by the home buyers and the lawyers appearing for them, including Senior Counsel M.L. Lahoty, the top court further shielded the interest of the home buyers by directing that neither Noida, Greater Noida nor the banks who had advanced loans to Amrapali Group would recover their dues by selling flats of the home buyers or land that was leased out for the projects. They can, however, recover dues by selling other properties under attachment, the court said in a judgment that ran into 270 pages and contained 11 directions.

The court fixed 8 per cent commission to NBCC for the task of completing the projects and handing over the possession of flats to home-buyers.

The home buyers have to deposit the outstanding amount within three months in the bank account to be opened in the Supreme Court branch of Uco Bank.

The court directed the Institute of Chartered Accountants of India to initiate proceedings against the Chartered Accountant Anil Mital for his conduct in various transactions.

Enforcement Directorate looks for assets to attach

The Enforcement Directorate (ED) has filed a criminal case of money laundering against Amrapali Group and its promoters.

The Supreme Court on Tuesday directed the ED to investigate money laundering by directors and officials of the group.

According to sources, ED's zonal office in Lucknow filed a case under the Prevention of Money Laundering Act (PMLA) early this month after taking cognizance of 16 FIRs registered against the group by the Noida Police. The agency is now preparing to examine the promoters of the group and find their assets which can be attached on charges of contravening the anti-money laundering law, the sources said.

On February 28, the SC had allowed the Delhi Police to arrest Amrapali Group CMD Anil Sharma and two Directors.